<PAGE>
 
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-QSB

                          ____________________________ 

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES  EXCHANGE ACT OF 1934


FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997     COMMISSION FILE NUMBER  0-14653


                         CARDIAC CONTROL SYSTEMS, INC.
       (Exact Name of Small Business Issurer as specified in its charter)

                         _____________________________

      DELAWARE                                          74-2119162
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)


               3 COMMERCE BOULEVARD, PALM COAST, FLORIDA   32164
                                  (Address of Principal Executive Offices)

                                 (904) 445-5450
                          (Issuer's Telephone Number)


Check whether the Issuer (1)has filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES  X
                                                                      -----
NO
  -----

As of July 31, 1997, 2,619,371 shares of the Issuer's common stock, $.10 par
value, were issued and outstanding.


================================================================================
<PAGE>
 
                         CARDIAC CONTROL SYSTEMS, INC.

                                  FORM 10-QSB
                                 JUNE 30, 1997

                                     INDEX

<TABLE> 
<CAPTION> 

--------------------------------------------------------------------------------
                                                                       Page No.
--------------------------------------------------------------------------------
<S>                                                                       <C> 
 
Part I.   Financial Information

    Balance Sheet at June 30, 1997 (Unaudited)..............................  3

    Statements of Operations and Accumulated Deficit for the Three Months
        Ended June 30, 1997 and 1996 (Unaudited)............................  4

    Statements of Cash Flows for the Three Months Ended
        June 30, 1997 and 1996 (Unaudited)..................................  5

    Notes to Financial Statements...........................................  6

    Management's Discussion and Analysis of Financial Position
        and Results of Operations...........................................  9

Part II.   Other Information................................................ 13
</TABLE> 

                                       2
<PAGE>
 
                         PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                         CARDIAC CONTROL SYSTEMS, INC.
                                 BALANCE SHEET
                                  (Unaudited)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                                     June 30,
                                                                       1997
--------------------------------------------------------------------------------
<S>                                                                <C>
ASSETS
    Current assets
        Cash and cash equivalents................................. $    151,279
        Accounts and notes receivable.............................    1,226,022
        Inventories...............................................    1,637,794
        Prepaid expenses..........................................      414,894
                                                                   -------------
                     Total current assets.........................    3,429,989
                                                                   -------------

     Property, plant and equipment (net)..........................    1,893,102
                                                                   -------------

     Other assets
         Deferred financing costs, less accumulated amortization
          of $135,752.............................................      473,106
         Deferred license fees, less accumulated amortization of
          $10,000.................................................      190,000
         Other....................................................       79,925
                                                                   -------------
                     Total other assets...........................      743,031
                                                                   -------------
                     Total assets................................. $  6,066,122
                                                                   =============

LIABILITIES AND STOCKHOLDERS' EQUITY

     Current liabilities
         Accounts payable......................................... $    628,488
         Accrued compensation.....................................      289,399
         Accrued royalties........................................      276,048
         Other accrued expenses...................................       68,609
         Deposits payable.........................................      576,643
         Notes  and debt obligations  payable within one year.....      126,959
                                                                   -------------
                     Total current liabilities....................    1,966,146
                                                                   -------------

         Notes  and debt obligations  payable after one year......    2,374,944
         Other liabilities........................................       73,501
                                                                   -------------
                      Total liabilities...........................    4,414,591
                                                                   -------------


    Stockholders' equity
        Common stock, $.10 par value, 30,000,000 shares
         authorized,
              2,619,371 shares issued.............................      261,937
        Additional paid in capital................................   22,291,215
        Accumulated deficit.......................................  (20,894,566)
        Cumulative translation adjustment.........................       (7,055)
                                                                   -------------
                     Total stockholders' equity...................    1,651,531
                                                                   -------------

     Total liabilities and stockholders' equity................... $  6,066,122
                                                                   =============
</TABLE>
                 See accompanying notes to financial statements

                                       3
<PAGE>
 
                         CARDIAC CONTROL SYSTEMS, INC.
                          STATEMENTS OF OPERATIONS AND
                              ACCUMULATED DEFICIT
                                  (Unaudited)
<TABLE>
<CAPTION>
 
-------------------------------------------------------------------------------
Three Months  Ended June 30,                           1997           1996
-------------------------------------------------------------------------------
<S>                                                <C>            <C>
Revenue
   Net sales.....................................  $    852,288   $  1,202,493
   Royalty income................................       697,125        694,525
                                                   ----------------------------
       Total revenue.............................     1,549,413      1,897,018
                                                   ----------------------------

Costs and expenses
    Cost of products sold........................       503,815        679,944
    Selling, general and administrative expenses.       743,072        821,340
    Engineering, research and development
     expenses....................................       458,272        457,564
                                                   ----------------------------
        Total cost and expenses..................     1,705,159      1,958,848
                                                   ----------------------------

Operating income (loss)..........................      (155,746)       (61,830)
                                                   ----------------------------

Other income (expenses)
    Interest income..............................         5,983         10,548
    Interest expense.............................       (82,586)      (134,789)
    Other income.................................                       25,000
                                                   ----------------------------
        Total other income (expenses)............       (76,603)       (99,241)
                                                   ----------------------------
Net income (loss)................................      (232,349)      (161,071)

Accumulated deficit - beginning of period........   (20,662,217)   (19,780,977)
                                                   ----------------------------

Accumulated deficit - end of period..............  $(20,894,566)  $(19,942,048)
                                                   ============================

Net income (loss) per common share...............        $(0.09)        $(0.06)
                                                   ============================

Average number of common shares outstanding......     2,619,371      2,561,427
                                                   ============================
</TABLE>

                 See accompanying notes to financial statements

                                       4
<PAGE>
 
                         CARDIAC CONTROL SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS

                                  (Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Three Months Ended June 30,                                 1997         1996
--------------------------------------------------------------------------------
<S>                                                      <C>          <C>
 
Cash flows from operating activities
  Net income (loss)....................................  $ (232,349)  $ (161,071)
  Adjustment to reconcile net income (loss) to net
   cash used for operating activities:
     Depreciation and amortization.....................     104,579      126,381
     Gain on fixed assets disposals....................        (671)        (491)
     Cash provided by (used for):
       Accounts and notes receivable...................    (273,180)     (20,113)
       Inventories.....................................    (118,157)     217,158
       Prepaid expenses................................    (158,281)    (179,402)
       Other assets....................................                  (10,775)
       Accounts payable................................    (199,755)     (59,886)
       Accrued interest................................                   (4,760)
       Accrued compensation............................      36,253      (54,297)
       Accrued compensation absences...................      22,694        7,482
       Deposits payable................................     184,011      (28,525)
       Other accrued expenses..........................      (7,359)      40,443
       Other liabilities...............................      15,457        4,890
       Deferred royalties..............................                 (106,850)
                                                         --------------------------
Net cash provided by  (used for) by operating
 activities............................................    (626,758)    (229,816)
                                                         --------------------------

Cash flows from investing activities
  Purchase of property, plant and equipment............    (186,640)    (140,432)
  Proceeds from sale of equipment......................       4,260          491
  Increase in other assets.............................      (2,600)
                                                         --------------------------
Net cash provided by (used for) used by investing
 activities............................................    (184,980)    (139,941)
                                                         --------------------------

Cash flows from financing activities
  Proceeds from issuance of common stock and stock
   warrants, net of issuance expenses..................                  246,033
  Proceeds from notes and debt obligations payable.....   1,138,359       47,545
  Repayment of notes and debt obligations payable......    (193,983)    (254,568)
  Principal payments under capital lease obligations...      (1,534)        (929)
  Debt issuance costs..................................    (165,288)
                                                         --------------------------
Net cash provided by financing activities..............     777,554       38,081
                                                         --------------------------

Net increase (decrease) in cash and cash equivalents...     (34,184)    (331,676)

Cash and cash equivalents - beginning of year..........     185,463    1,167,181
                                                         --------------------------

Cash and cash equivalents - end of period..............  $  151,279   $  835,505
                                                         ==========================

Supplemental Cash Flow Information:
  Interest paid during the period......................  $   57,071   $   82,228
</TABLE>

                 See accompanying notes to financial statements

                                       5
<PAGE>
 
                         CARDIAC CONTROL SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS

NOTE 1 - GENERAL

The accompanying balance sheet of Cardiac Control Systems, Inc. (the "Company")
as of June 30, 1997, the related statements of operations and accumulated
deficit for the three months ended June 30, 1997 and 1996, and the statements of
cash flows for the three months ended June 30, 1997 and 1996 are unaudited. In
the opinion of management, such financial statements reflect all adjustments,
consisting only of normal recurring items, necessary to present fairly the
financial position of the Company at June 30, 1997 and the results of operations
and cash flows for the three months ended June 30, 1997 and 1996.

Certain reclassifications have been made to the unaudited financial statements
previously reported for the three months ended June 30, 1996 to conform with
classifications used in the unaudited financial statements for the three months
ended June 30, 1997.

The accompanying unaudited financial statements as of June 30, 1997 and for the
three months ended June 30, 1997 and 1996 should be read in conjunction with the
Company's audited financial statements for the year ended March 31, 1997.

The accompanying unaudited financial statements have been prepared assuming that
the Company will continue operations on a going-concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. However, the Company has a history of net losses
and incurred a net loss for the three months ended June 30, 1997 of  $232,349.
The Company's ability to continue as a going concern is dependent upon the
attainment of a profitable level of operations. The Company believes that
continual development of new product and resultant sales growth is critical to
attaining a profitable level of operations. Therefore, the Company is continuing
its efforts to invest in development of its single lead technology and expand
its sales volume, both domestically and internationally. Management believes
that the Company has the potential to increase sales and ultimately achieve a
profitable level of operations. Also, the Company is pursuing additional working
capital to expand its market position and pursue development of new
technologies. However, there is no assurance that the Company will be able to
attain profitable operations and continue operations as a going concern.

NOTE 2 - LOSS PER COMMON SHARE

Primary loss per share of common stock is based on the weighted average number
of common shares and common share equivalents, principally in the form of
options and warrants, outstanding during the period.  Common stock equivalents
have not been included for the three months ended June 30, 1997 and 1996 as
their effect on the loss per share is anti-dilutive.

The FASB has issued SFAS No. 128, "Earnings per Share," which provides guidance
for computing and presenting earnings per share (EPS).  This statement
simplifies the standards for computing EPS previously found in APB Opinion No.
15, "Earnings per Share."  This statement, when adopted, is not expected to have
a material impact on the Company.

                                       6
<PAGE>
 
NOTE 3 - INVENTORIES

Inventories at June 30, 1997 are summarized as follows:
<TABLE>
<CAPTION>
--------------------------------------------
                              June 30, 1997
                              --------------
<S>                           <C>
Raw materials and supplies..  $     858,253
Work-in-process.............        464,731
Finished goods..............        333,595
                              --------------
                                  1,656,579
Reserve for obsolescence....        (18,785)
                              --------------
                              $   1,637,794
--------------------------------------------
</TABLE>

Finished goods inventories include approximately $166,886 of products consigned
to customers and independent sales representatives at June 30, 1997.


NOTE 4 - NOTES AND DEBT OBLIGATIONS PAYABLE

Notes and debt obligations consist of the following at June 30, 1997:

<TABLE>
<CAPTION>
-----------------------------------------------------------
                                             June 30, 1997
                                            ---------------
<S>                                         <C>
Sirrom mortgage note, net of discount (A).. $    1,434,573
Coast Business Credit (B)..................        999,219
Other......................................         68,111
                                            ---------------
                                                 2,501,903
Amount payable within one year.............       (126,959)
                                            ---------------
Amount payable after one year.............. $    2,374,944
-----------------------------------------------------------
</TABLE>

(A)  On March 31, 1995, the Company entered into a Loan and Security Agreement
     (the "Loan Agreement") with Sirrom Capital Corporation ("Sirrom") and
     executed a $1,500,000 secured promissory note. Interest on the note is
     payable monthly at 13.5% and principal is due on March 31, 2000. The note
     is secured by a first mortgage lien on all the Company's real and personal
     property, excluding inventory and accounts receivable, but including
     general intangibles such as its patents and royalties. The Loan Agreement
     restricts the Company from incurring additional indebtedness in excess of
     $200,000 annually without the lender's consent. In addition, the Company
     must give the lender advance notice of certain events, such as dividend
     payments, certain new stock issues, reorganizations, and merger or sale of
     substantially all assets.

     In connection with the Loan Agreement, the Company granted the lender
     warrants to purchase, initially, 100,000 shares of the Company's common
     stock at $.01 per share. An additional 50,000 warrants to purchase shares
     of common stock at $.01 per share will be granted to the lender upon each
     anniversary date, beginning March 31, 1997 through March 31, 1999, that any
     amount owed to Sirrom shall be outstanding. On March 31, 1997, the Company
     granted Sirrom 50,000 additional warrants pursuant to this agreement. The
     Company recorded $279,000 (100,000 shares) in fiscal 1995 and $71,376
     (50,000 shares) in fiscal 1997 as a debt discount with the offset to
     additional paid-in capital, representing the difference between the
     estimated fair market value of the underlying stock at the date of grant
     and $.01 per share. This has resulted in an effective interest rate of
     approximately 30% on the 

                                       7
<PAGE>
 
     Sirrom debt. The Sirrom note includes an unamortized debt discount of
     $65,427 at June 30, 1997

(B)  On June 13, 1997, the Company entered into a Loan Agreement ("Agreement")
     with Coast Business Credit ("CBC") for a maximum borrowing of $3.5 million
     which includes a line of credit up to $2.7 million, a $500,000 Subline for
     capital expenditures ("CAPEX"), and a $300,000 Term Loan.  The maximum
     borrowing base available under the line of credit is based upon eligible
     receivables and inventory as defined in the Agreement.  The maturity date
     for the Agreement is June 30, 2000.  The CAPEX and the Term Loan are based
     upon a 48 month amortization period.  The interest rate on the line of
     credit is equal to the prime rate plus 2%, and the interest rate for the
     Term Loan and the CAPEX Subline is equal to prime rate plus 2.25%.
     Borrowings under the Agreement are collateralized by a first security
     interest in substantially all of the assets of the Company.  The Agreement
     also contains a minimum tangible net worth requirement.  In addition, CBC
     was granted warrants to purchase 37,500 shares of stock at $4 per share,
     expiring June 30, 2002.

     In conjunction with the Agreement, the Company obtained an Intercreditor
     and Subordination Agreement between CBC and Sirrom. This agreement provides
     that Sirrom subordinate its first security interest in the assets of the
     Company to CBC, however, the priority interest of CBC in the Company's real
     estate is limited to $500,000. As consideration for its waiver of its first
     security interest in the assets of the Company, Sirrom was granted warrants
     to purchase 50,000 shares of stock at $5 per share, exercisable at any time
     from June 6, 1997 and expiring on June 6, 2002.

                                       8
<PAGE>
 
Item 2.   Management's Discussion and Analysis of Financial Position and Results
of Operations

This Quarterly Report on Form 10-QSB contains forward looking statements within
the meaning of section 21E of the Securities Exchange Act of 1934, as amended.
Additional written or oral forward looking statements may be made by the Company
from time to time in filings with the Securities and Exchange Commission or
otherwise.  Such statements may include, but not be limited to, projections of
revenues, income, or loss, capital expenditures, plans for future operations,
financing needs or plans, and plans relating to product or services of the
Company, as well as assumptions relating to the foregoing.  The words "believe,"
"expect," "anticipate," "estimate, " project," and similar expressions identify
forward looking statements.  Forward looking statements are inherently subject
to risks and uncertainties, some of which cannot be predicted or quantified.
Future events and actual results could differ materially from those set forth
in, contemplated by, or underlying the forward looking statements.  Statements
in this Quarterly Report, including the Notes to the Financial Statements and
"Management's Discussion and Analysis of Financial Position and Results of
Operation, describe factors, among others, that could contribute to or cause
such differences.

Financial Position and Liquidity

The Company's liquidity benefited from the loan agreement dated June 13, 1997
with Coast Business Credit (CBC) for a maximum borrowing of $3.5 million, of
which approximately $1.0 million was drawn at June 30, 1997.

Cash used by operations during the first three months of fiscal 1998
approximated $627,000. Capital expenditures and repayment of debt and capital
lease obligations additionally utilized approximately $187,000 and $194,000
respectively.  Proceeds of notes and debt obligations payable approximated
$1,138,000.  Overall, negative cash flow for the first three months of fiscal
1998 approximated $34,000.

The Company has commitments of approximately $217,000 for the acquisition of
capital assets.  It also has material commitments pursuant to certain inventory
procurement contracts that aggregate approximately $1,075,000 at June 30, 1997.

Results of Operations

Overview.  Overall, the Company's total revenues for the first quarter of
fiscal 1998 decreased 18% to $1.55 million as compared to $1.9  million for the
first quarter of fiscal 1997.  Sales decreased from $1.2 million to $0.85
million but royalties remained at $0.7 million for the first quarter of  fiscal
1998 as in the first quarter of fiscal 1997. Royalty income represents royalties
from Sulzer Intermedics Inc. pursuant to a License Agreement between the Company
and Sulzer Intermedics. Costs and expenses in the first quarter of fiscal 1998
decreased by 13% to $1.7 million compared to $1.96 million in the first quarter
of fiscal 1997, which resulted in an operating loss of $155,746 in the first
quarter of fiscal 1998 compared to an operating loss of $61,830 in the first
quarter of fiscal 1997.  Other expenses, net of other income, for the first
quarter of fiscal 1998 decreased by 23% to $76,603 compared to $99,241 in the
first quarter of fiscal 1997, which resulted in a net loss of $232,349 in the
first quarter of fiscal 1998 compared to a net loss of $161,071 in the first
quarter of fiscal 1997.

Sales.  Product sales decreased by 29% from the comparative period in fiscal
1997.  Sales of pacers and electrode leads decreased by 13% and 35%
respectively.  The decline in sales is due to the Company having focused its
resources into the research and development of advanced single lead systems in
preparation for intended long term growth and increased competition from other
companies that have entered the market with single lead products.

                                       9
<PAGE>
 
Sales by geographic area for the first quarter of fiscal 1998 and 1997 are as
follows:

<TABLE>
<CAPTION>

---------------------------------------------------------------------- 
Geographic Area                           1998             1997
----------------------------------------------------------------------
<S>                                 <C>             <C>
United States....................   $      781,009  $     1,069,518
Europe...........................           71,279          132,975
                                    ----------------------------------
                                    $      852,288  $     1,202,493
----------------------------------------------------------------------
</TABLE>

Royalty Income.  Royalty income represents royalty fees from Sulzer Intermedics
Inc. pursuant to a License Agreement between the Company and Sulzer Intermedics,
whereby the Company licensed the technology relating to its single-pass atrial-
controlled ventricular pacing system.

Costs of Products Sold.  The cost of products sold in the first quarter of
fiscal 1998 was $503,815, compared to $679,944 in the first quarter of fiscal
1997, representing a decrease of 26% as compared to the decrease of 29% in sales
values, which decreased the gross margin from 43% to 41%.

Selling, General and Administrative Expenses.  Selling, general and
administrative expenses were $743,072 in the first quarter of fiscal 1998,
representing a decrease of 10% from $821,340 in the first quarter of fiscal
1997. Selling expenses decreased 28%  from $481,740 in the first quarter of
fiscal 1997 to $346,377 in the first quarter of fiscal 1998 due to reduced sales
commissions, as well as a refocus of resources into research and development.
General and administrative expenses increased from $339,600 in the first quarter
of fiscal 1997 to $396,695 in the first quarter of fiscal 1998 due largely to
external professional services.

Engineering, Research and Development Expenses.  Engineering, research and
development costs were $458,272 in the first quarter of fiscal 1998, compared to
$457,564 in the first quarter of fiscal 1997 due to the sustained activity in
the development of advanced products.  In addition, $149,206 of research costs
were capitalized in the first quarter of fiscal 1998, compared to nil in the
first quarter of fiscal 1997.

Other Income and Expenses.  Interest income was $5,983 during the first quarter
of fiscal 1998, representing a decrease of 43% from $10,548 in the first quarter
of fiscal 1997.  Interest expense decreased from $134,789 in the first quarter
of fiscal 1997 to $82,586 in the first quarter of fiscal 1998 due to the Company
having completed, in the fourth quarter of fiscal 1997, both the repayment to
Sulzer Intermedics of the balance of the loan of $1.0 million obtained in
October, 1995 and the amortization of the discount in the sum of $279,000,
recorded in March 1995, relating to the warrant issued to Sirrom Capital
Corporation in respect of 100,000 shares of the Company's common stock at $0.01
a share.

Operating Trends and Uncertainties

Sales. The ability of the Company to attain a profitable level of operations is
dependent upon expansion of sales volume, both domestically and internationally
and continued development of new, advanced products.  The Company believes that
with the continued release of new products and its world-wide market expansion,
it will have the potential to increase sales.

The European Union ("EU") nations have adopted universal standards as developed
by the International Organization for Standardization ("ISO") in order to
provide simplified trade among the member nations and to assure free access to
trade while maintaining quality standards for products sold.  All companies
doing business in these nations must be certified to these standards set forth
by the EU which is evidenced by being granted the CE Mark.  Standards for active
implantable medical products were implemented January 1, 1993, with a transition
period ending December 31, 1994.  The Company Quality System  received
certification  to the ISO 9002 on November 19, 1996.  The CE Mark certification
was issued by the Notified Body, TUV Product Service, of Munich, Germany,

                                       10
<PAGE>
 
during the second quarter of fiscal 1996 for the Company's products intended for
sale in Europe.   The Company is developing design control processes in
preparation for a compliance audit to ISO 9001.

Until March 1995, the Company was the only manufacturer commercially marketing
single-lead atrial-controlled ventricular pacemakers.  However, Sulzer
Intermedics Inc., a competitor of the Company, received FDA clearance to
commercially market a single-lead atrial-controlled ventricular pacemaker that
it developed utilizing the Company's technology pursuant to license and supply
agreements with the Company.  Sulzer Intermedics commenced marketing its new
pacemakers in March 1995.  In addition, other competitors have also commenced
marketing competitive single lead products.

Although the introduction of the new single lead pacemakers poses competition
for the Company, management believes that the Company will benefit from such
competition since the new competition will increase the visibility of single-
lead atrial-controlled ventricular pacemakers in the marketplace and thereby
increase market acceptance of the product.  Further, management  believes that
there is a sufficient market to accommodate both the Company's and other
competitive pacemakers.  The Company estimates that its market share of
pacemakers generally is less than 1% of an estimated total worldwide market of
$2 billion per year.

Various factors impact on a firm's ability to increase market share including,
but not limited to, the financial strength of the firm, the ability of the firm
and its competitors, and the time involved in obtaining FDA clearance for new or
improved  products.  Therefore, although management believes that the Company is
well poised for viable growth, management cannot predict the degree of market
share the Company can obtain.  Factors beyond the Company's control may impede
its progress  and in such event, its business and operations would be adversely
impacted.

The Company's ability successfully to compete with Sulzer Intermedics and other
pacemaker manufacturers will depend on the Company's ability to supply product
and recruit and increase a quality sales force and continue to develop and
release new advanced products.  The Company historically has been restricted in
its marketing capabilities due to financial constraints impeding its ability to
supply  products and recruit and train a sales force. However, the Company
believes that the credit facility from Coast Business Credit and the cash flow
generated from Sulzer Intermedics' orders and royalties have positioned the
Company to increase its research and development capabilities and its sales
force, and to provide an uninterrupted supply of products.  However, actual
results may differ materially from the Company expectations, depending on a
variety of important factors, some of which may be out of the Company's control,
including, among others, the availability of raw materials from suppliers, the
timing of FDA clearance of new products, the ability of the Company to keep pace
with market demand for new products, the ability of the Company's sales force,
and the ability of the Company to successfully compete with competitors who have
greater financial resources.

As discussed above, the manufacture and sale of leads to Sulzer Intermedics
produce income for the Company. The Company sells electrode leads to Sulzer
Intermedics for its new systems under an Amended and Restated Supply Contract
that terminates on August 1, 1998.  The Company also receives royalties from
Sulzer Intermedics sales of  its products incorporating the licensed technology
under an Amended and Restated License Agreement. The Company anticipates
supplying components to Sulzer Intermedics under the supply agreement for the
next several years.  An increase in demand for components by Sulzer Intermedics
will put further demands on the Company to supply the products; however, with
the anticipated cash flow from such orders that would be generated under the
license and supply agreements, plus anticipated positive cash flow from sales of
other products by the Company, management believes that the Company will be in a
position to accommodate an increase in orders.

It is anticipated that Sulzer Intermedics will eventually develop its own
manufacturing capability for electrode leads necessary for its new pacemakers.
However, any such development will take time.  Although the Company does not
know how long it will take Sulzer Intermedics to develop its own manufacturing
capability, added to any such development period would be the time necessary to
obtain FDA clearance of its manufacturing process.  Thus, although the Company
cannot guarantee that it will continue to supply Sulzer Intermedics with
products, the Company anticipates providing Sulzer Intermedics with components
for the next few years.  However, in the event Sulzer Intermedics receives FDA
approval in a shorter time-frame than anticipated, or other events occur which

                                       11
<PAGE>
 
causes a decrease in Sulzer Intermedics' orders, the Company's business and
operating results would be adversely affected.

Sources of Supply.  Two of the Company's principal suppliers of materials used
primarily in electrode lead production, Dow Corning Corp. and E.I. DuPont de
Nemours & Company, indicated that they will no longer supply their materials to
the medical device industry for use in implantable devices.  In July 1993, the
FDA published in the Federal Register a one-time-only requirement for medical
device manufacturers to file a special notification of material supplier changes
resulting from the decision of Dow Corning to discontinue supplying its
materials to medical device manufacturers.  The Company filed the "Special
Silicone Notification" for its products effected by the Dow Corning decision in
September 1993.  In this notification alternate suppliers and materials were
identified and supporting technical biological test data were provided for the
alternate materials.  The FDA acknowledged receiving the Company's notification
and indicated that, unless otherwise notified by the FDA, the alternate
materials identified in the notification may be used in the Company's products
in place of the comparable Dow Corning materials.  No further FDA approvals of
the alternate materials of such suppliers were required.

With respect to other materials changes resulting from decisions by the material
suppliers to discontinue supplying the medical device industry, e.g. E.I. DuPont
de Nemours, the FDA has indicated that such changes shall be handled on a case-
by-case basis through the established product approval processes within the FDA.
The availability of materials suitable for use in implantable medical devices is
an industry-wide problem and is not unique to the Company or to the
cardiovascular device segment of the industry.  A tentative replacement for the
DuPont supplied material has been identified which meets manufacturing
requirements.  Biocompatibility studies have been initiated on the replacement
candidate.  Since the candidate replacement material is comprised of the same
chemical composition as the DuPont material, it is expected that it will be
comparable with respect to the performance characteristics and biocompatibility
of the current material in use. Similarly, FDA approval of this replacement
material is anticipated to be forthcoming based upon a satisfactory outcome of
the testing in progress.  The Company believes, however, that it has a
sufficient quantity of the DuPont material on supply to meet the Company's
anticipated demand for the next several years.

Suppliers of custom Application Specific Integrated Circuits (ASIC's) have
advised that the technology used to produce ASIC's will no longer be supported.
As such, the Company placed one last bulk order to ensure the availability of
sufficient ASIC's to satisfy projected demands for product.  State of the art
ASIC's will be developed for the new pacing system, obviating the need for
perpetual supply of the currently used ASIC's.

Inflation and Changing Prices

In the opinion of Company management, the rate of inflation during the past two
fiscal years has not had any material impact on the Company's operations.
Because of the implementation of cost containment and new Medicare regulations,
any increase in sales revenues is expected to result from an increase in the
volume of business rather than from an increase in selling prices. The Company's
pricing structure may not reflect inflation rates, due to constraints of
Medicare regulations, market conditions and competition.

Recent Accounting Pronouncement

The FASB has issued SFAS No. 128, "Earnings per Share," which provides guidance
for computing and presenting earnings per share (EPS).  This statement
simplifies the standards for computing EPS previously found in APB Opinion No.
15, "Earnings per Share."  This statement , when adopted, is not expected to
have a material impact on the Company.

                                       12
<PAGE>
 
                          PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

On  January 4, 1994, a financial brokering and consulting firm filed suit
against the Company in the Circuit Court of the 11th Judicial Circuit in and for
Dade County, Florida (the "Court"), alleging that the Company had breached
certain contractual duties and obligations.  The suit requests a judgment
requiring the Company to deliver warrants to purchase 15% of the Company's
common stock, and damages in excess of $15,000.  The Company denied liability
and filed a counterclaim alleging that the brokering firm fraudulently induced
the Company into the Agreement then breached the Agreement and certain fiduciary
duties.  Management plans to vigorously defend the lawsuit and pursue its
counterclaims. In the opinion of management, this action has no merit and the
ultimate outcome is not expected to materially affect the financial position of
the Company.

Item 2.   Changes in Securities

        (a)   Not applicable.

        (b)   Not applicable.

        (c)   Effective March 31, 1997, the number of shares of the Company's
              common stock, $0.10 par value, which Sirrom Capital Corporation
              ("Sirrom"), an accredited investor, has the right to purchase at
              one cent ($0.01) per share, increased by 50,000. This increase was
              pursuant to the terms of a warrant issued to Sirrom, pursuant to
              the Loan and Security Agreement between the Company and Sirrom
              dated March 31, 1995, under the terms of which the Company is
              required to grant Sirrom the right to purchase an additional
              50,000 shares of common stock upon each anniversary date,
              commencing March 31, 1997 that any amount owed Sirrom shall be
              outstanding.

              On June 6, 1997, the Company issued to Sirrom Capital Corporation
              ("Sirrom"), an accredited investor, 50,000 common stock purchase
              warrants exercisable at $5.00 per share at any time from June 6,
              1997 and expiring June 6, 2002. The warrants were issued in
              connection with a loan from Coast Business Credit which closed on
              June 13, 1997.

              On June 13, 1997, the Company issued to Coast Business Credit
              ("CBC"), an accredited investor, 37,500 common stock purchase
              warrants exercisable at $4.00 per share commencing immediately and
              expiring June 30, 2002. The warrants were issued in connection
              with a loan from CBC which closed on June 13, 1997.

              All of the foregoing transactions were entered into by the Company
              in reliance on Section 4(2) of the Securities Act of 1933. The
              foregoing warrant holders indicated their investment intent and
              the warrant instruments bear a legend accordingly.

                                       13
<PAGE>
 
Item 6.  Exhibits and Reports on Form 8-K
6(a).  Exhibits

Exhibits filed in Part II of this Report are as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Exhibit                               Sequential Page Number or
Number   Description                  Incorporation by Reference to
--------------------------------------------------------------------------------
<C>      <S>                          <C>
3.0      Certificate of               Exhibit 3.0 to Amendment No. 1 to Form
         Incorporation of the         S-1 Registration Statement filed on
         Company, as amended          February 1, 1988, Registration No.
                                      33-16490 and Form 10-K for the year ended
                                      March 31, 1990, File No. 0-14653

3.1      Amendment to Certificate     Exhibit 3.1 to Form S-1 Registration
         of Incorporation             Statement filed on March 2, 1995,
                                      Registration No. 33-89938

3.2      By-Laws of the Company       Exhibit 3.1 to Form S-18 Registration
                                      Statement filed on October 16, 1985,
                                      Registration No. 33-9208

3.3      Amendment to Bylaws          Exhibit 3.3 to Form S-1 Registration
                                      Statement filed on March 2, 1995,
                                      Registration No. 33-89938

4.0      Form of Common Stock         Exhibit 4.0 to Form S-1 Registration
         Certificate                  Statement filed on March 2, 1995,
                                      Registration No. 33-89938

4.1      Form of Sales                Exhibit 4.13 to Form 10-Q for the Quarter
         Representative Stock         Ended September 30, 1988, File No. 0-14653
         Option Agreement

4.2      Cardiac Control Systems,     Exhibit 4.15 to Form 8-K Current Report
         Inc. 5% Convertible          dated October 11, 1994, File No. 0-14653
         Debenture due October 31,
         1999

4.3      Combined 1987-1992           Exhibit 4.8 to Amendment No. 1 to Form
         Non-Qualified Stock Option   S-1 Registration Statement filed on April
         Plan                         17, 1995, Registration No. 33-89938

4.4      Stock Purchase Warrant       Exhibit 4.1 to Form 8-K Current Report,
         dated March 31, 1995 in      dated March 31, 1995, File No. 0-14653
         favor of Sirrom Capital
         Corporation

4.5      Stock Purchase Warrant,      Exhibit 4.2 to Form 8-K Current Report,
         dated March 31, 1995 in      dated March 31, 1995, File No. 0-14653
         favor of Dow Corning
         Enterprises, Inc.

4.6      Stock Purchase Warrant,      Exhibit 4.6 to Form 10-KSB for the year
         dated October 15, 1995 in    ended March 31, 1996, File No. 0-14653
         favor of Sirrom Capital
         Corporation

4.7      Stock Purchase Warrant,      Exhibit 4.7 to Form 10-KSB for the year
         dated March 29, 1996 in      ended March 31, 1996, File No. 0-14653
         favor of Grupo Taper,
         S.A.Exhibit
</TABLE> 

                                       14
<PAGE>
 
<TABLE> 
<CAPTION> 
--------------------------------------------------------------------------------
Exhibit                               Sequential Page Number or
Number   Description                  Incorporation by Reference to
--------------------------------------------------------------------------------
<S>      <C>                          <C> 
 4.8     Stock Purchase Warrant,      Exhibit 4.1 to Form 8-K Current Report
         dated June, 1997 in favor    dated June 13, 1997, File No. 0-14653.
         of Coast Business Credit,
         a Division of Southern
         Pacific Thrift and Loan
         Association

 4.9     Stock Purchase Warrant       Exhibit 4.2 to Form 8-K Current Report
         dated June 6, 1997 in        dated June 13, 1997, File No. 0-14653
         favor of Sirrom Capital      $481,740
         Corporation

10.0     License Agreement between    Exhibit 10.1 to Form 10-Q for the Quarter
         Hughes/Bertolet and the      Ended September 30, 1986, File No. 0-14653
         Company

10.1     Settlement Agreement and     Exhibit 10.2 to Form 10-K for the Year
         Release between Applied      Ended March 31, 1990, File No. 0-14653
         Cardiac Electro-physiology
         and the Company

10.2     Amended and Restated         Exhibit 10.19 to Form 8-K Current Report,
         License Agreement between    dated April 2, 1993, File No. 0-14653
         Sulzer Intermedics Inc.
         and the Company, dated
         April 2, 1993

10.3     Amended and Restated         Exhibit 10.20 to From 8-K Current Report,
         Supply Contract between      dated April  2, 1992, File No. 0-14653
         Sulzer Intermedics Inc.
         and the Company, dated
         April 2, 1993

10.4     Employment Agreement         Exhibit 10.24 to Form 8-K Current Report,
         between Bart C. Gutekunst    dated October 11, 1994, File No. 0-14653
         and the Company, dated
         October 13, 1994

10.5     Employment Agreement         Exhibit 10.25 to Form 8-K Current Report,
         between Alan J. Rabin and    dated October 11, 1994, File No. 0-14653
         the Company, dated October
         13, 1994

10.6     Employment Agreement         Exhibit 10.12 to Form 10-Q for the
         between Robert S. Miller     Quarter Ended December 31, 1994, File No.
         and the Company, dated       0-14653
         December 12, 1994

10.7     Agreement between LEM        Exhibit 10.13 to Form 10-Q for the
         Biomedica, s.r.l. and the    Quarter Ended December 31, 1994, File
         Company, dated October 1,    0-14653
         1994

10.8     Agreement between the        Exhibit 10.12 to Form S-1 Registration
         Company and Alan J. Rabin    Statement filed on March 2, 1995,
         and Bart C. Gutekunst,       Registration No. 33-89938
         dated July 1, 1994
</TABLE> 

                                       15
<PAGE>
 
<TABLE> 
<CAPTION> 

--------------------------------------------------------------------------------
Exhibit                               Sequential Page Number or
Number   Description                  Incorporation by Reference to
--------------------------------------------------------------------------------
<S>      <C>                          <C> 
 10.9    Form of Indemnification      Exhibit 10.13 to Form S-1 Registration
         Agreement between the        Statement filed on March 2, 1995,
         Company and each Director,   Registration No. 33-89938
         executed December 1994

10.10    Employment Agreement         Exhibit 10.14 to Form S-1 Registration
         between Robert R. Brownlee   Statement filed on March 2, 1995,
         and the Company dated as     Registration No. 33-89938
         of October 1, 1994

10.11    Loan and Security            Exhibit 10.1 to Form 8-K Current Report,
         Agreement between the        dated March 31, 1995, File No. 0-14653
         Company and Sirrom Capital
         Corporation, dated March
         31, 1995

10.12    $1,500,000 Secured           Exhibit 10.2 to Form 8-K Current Report,
         Promissory Note in favor     dated March 31, 1995, File No. 0-14653
         of Sirrom Capital
         Corporation, dated March
         31, 1995

10.13    Mortgage, Assignment of      Exhibit 10.3 to Form 8-K Current Report,
         Rents and Leases, and        dated March 31, 1995, File No. 0-14653
         Security Agreement in
         favor of Sirrom Capital
         Corporation, dated March
         31, 1995

10.14    Second Mortgage and          Exhibit 10.4 to Form 8-K Current Report,
         Security Agreement in        dated March 31, 1995, File No. 0-14653
         favor of Bart Gutekunst,
         as trustee, dated March
         31, 1995

10.15    Subordination Agreement      Exhibit 10.5 to Form 8-K Current Report,
         between the Company Sirrom   dated March 31, 1995, File No. 0-14653
         Capital Corporation, and
         the Debentureholders,
         dated March 31, 1995

10.16    Promissory Note and          Exhibit 10.16 to Form 10-QSB for the
         Security Agreement between   Quarter ended September 30, 1995, File
         Sulzer Intermedics Inc.,     No. 0-14653
         and the Company dated
         October 20, 1995

10.17    Amendment 2 to Supply        Exhibit 10.17 to Form 10-QSB for the
         Contract between Sulzer      Quarter ended September 30, 1995, File
         Intermedics Inc., and the    No. 0-14653
         Company, dated October 20,
         1995
</TABLE> 

                                       16
<PAGE>
 
<TABLE> 
<CAPTION> 
--------------------------------------------------------------------------------
Exhibit                               Sequential Page Number or
Number   Description                  Incorporation by Reference to
--------------------------------------------------------------------------------
<S>      <C>                          <C> 
10.18    Amendment 2 to License       Exhibit 10.18 to Form 10-QSB for the
         Agreement between Sulzer     Quarter ended September 30, 1995, File
         Intermedics Inc., and the    No. 0-14653
         Company, dated October 20,
         1995

10.19    Distribution Agreement       Exhibit 10.19 to Form 10-QSB for the
         between Grupo Taper S.A.     Quarter ended December 31, 1995, File No.
         and the Company, dated       0-14653
         December 20, 1995

10.20    Distribution Agreement       Exhibit 10.20 to Form 10-QSB for the
         between LEM Biomedica        Quarter ended September 30, 1996, File
         s.r.l. and the Company,      No. 0-14653
         dated October 1, 1996

10.21    Security Agreement and       Exhibit 10.21 to Form 10-QSB for the
         Secured Promissory Note      Quarter ended December 31, 1996, File No.
         between Bart C. Gutekunst    0-14653
         and the Company, dated
         October 28, 1996.

10.22    Security Agreement and       Exhibit 4.1 to Form 10-KSB for the year
         Secured Promissory Note      ended March 31, 1997, File No. 0-14653
         between Bart C. Gutekunst
         and the Company, dated
         March 24, 1997.

10.23    Security Agreement and       Included herewith.
         Secured Promissory Note
         between Alan J. Rabin and
         the Company, dated April
         15, 1997.

10.24    Security Agreement and       Included herewith
         Secured Promissory Note
         between Bart C. Gutekunst
         and the Company, dated
         April 21, 1997.

10.25    Loan and Security            Exhibit 10.1 to Form 8-K Current Report
         Agreement Coast Business     dated June 13, 1997, File No. 0-14653
         Credit and the Company,
         dated June 13, 1997

10.26    $300,000 Secured             Exhibit 10.2 to Form 8-K Current Report
         Promissory Note of the       dated June 13, 1997, File No. 0-14653
         Company to Coast Business
         Credit, dated June 13, 1997

10.27    $500,000 CAPEX Promissory    Exhibit 10.3 to Form 8-K Current Report
         Note of the Company to       dated June 13, 1997, File No. 0-14653
         Coast Business Credit,
         dated June 13, 1997
</TABLE> 

                                       17
<PAGE>
 
<TABLE> 
<CAPTION> 
--------------------------------------------------------------------------------
Exhibit                               Sequential Page Number or
Number   Description                  Incorporation by Reference to
--------------------------------------------------------------------------------
<S>      <C>                          <C> 
10.28    Intercreditor and            Exhibit 10.4 to Form 8-K Current Report
         Subordination Agreement      dated June 13, 1997, File No. 0-14653
         between Coast Business
         Credit and Sirrom Capital
         Corporation

10.29    Mortgage and Security        Exhibit 10.5 to Form 8-K Current Report
         Agreement between the        dated June 13, 1997, File No. 0-14653
         Company and Coast Business
         Credit

10.30    Security Agreement           Exhibit 10.6 to Form 8-K Current Report
         (Intellectual Property)      dated June 13, 1997, File No. 0-14653
         between the Company and
         Coast Business Credit

10.31    Grant of Security Interest   Exhibit 10.7 to Form 8-K Current Report
         - Patents in favor of Coast  dated June 13, 1997, File No. 0-14653
         Business Credit

27       Financial Data Schedule      Included herewith
--------------------------------------------------------------------------------
</TABLE>

   Copies of the above described exhibits will be furnished to the
stockholders upon written request, addressed to President and Chief Executive
Officer, Cardiac Control Systems, Inc., 3 Commerce Boulevard, Palm Coast,
Florida 32164.

6(b). Reports on Form 8-K

      The Company filed Form 8-K dated June 13, 1997 to report the closing
on a maximum $3.5 million credit facility with Coast Business Credit, a division
of Southern Pacific Thrift and Loan Association (Coast), pursuant to a Loan and
Security Agreement.

                                       18
<PAGE>
 
                                    SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                          CARDIAC CONTROL SYSTEMS, INC.
                                   (Registrant)



     Date: 8/11/1997                     By:/s/ Alan J. Rabin
          -----------------                 ----------------------------------
                                            Alan J. Rabin
                                            President and Chief Executive 
                                            Officer


     Date: 8/11/1997                     By:/s/ W. Alan Walton
          -----------------                 ----------------------------------
                                            W. Alan Walton
                                            Executive Vice President and Chief
                                            Operating Officer

                                       19
<PAGE>
 
                               INDEX OF EXHIBITS


     Exhibit                  Description
     Number



     10.23            Security Agreement and Secured Promissory Note
                      between Alan J. Rabin and the Company,
                      dated April 15, 1997

     10.24            Security Agreement and Secured Promissory Note
                      between Bart C. Gutekunst and the Company,
                      dated April 21, 1997

     27               Financial Data Schedule

                                       20